text-S&P rates Transocean Inc.'S new senior unsecured notes BBB

Transocean Ltd 
S&P Rates Transocean Inc.'s New Senior Unsecured Notes 'BBB-' 
NEW YORK (Standard & Poor's) Nov. 30, 2011--Standard & Poor's Ratings Services
today assigned its 'BBB-' rating to Transocean Inc.'s proposed senior
unsecured note offering. The company intends to use proceeds to repay
near-term debt maturities and general corporate purposes.
The corporate credit rating on Transocean is 'BBB-' and the outlook is
negative. (For the complete corporate credit rating rationale, see the
research update on Transocean Inc. published on Oct. 5, 2011).
RELATED CRITERIA AND RESEARCH
Key Credit Factors: Business And Financial Risks In The Oil And Gas
Exploration And Production Industry, Nov. 10, 2008
RATINGS LIST
Transocean Inc.
 Corporate credit rating                     BBB-/Negative/A-3
New Rating
 Senior unsecured notes due 2016             BBB-
 Senior unsecured notes due 2021             BBB-
 Senior unsecured notes due 2041             BBB-
Complete ratings information is available to subscribers of RatingsDirect on
the Global Credit Portal at www.globalcreditportal.com. All ratings affected
by this rating action can be found on Standard & Poor's public Web site at
www.standardandpoors.com. Use the Ratings search box located in the left
column.
Primary Credit Analyst: Lawrence Wilkinson, New York (1) 212-438-1882;
                        lawrence_wilkinson@standardandpoors.com

Chesapeake says still buying Utica properties

* Sees competition from Exxon, Hess in Utica
* Still expects Utica JV by end-year
* Shares up 4.3 pct, but lagging oil co's index
HOUSTON, Nov 30 (Reuters) - Chesapeake Energy Corp is still buying acreage in Ohio's Utica shale formation, CEO Aubrey McClendon said on Wednesday, but is facing increased competition there from companies such as Exxon Mobil and Hess Corp .
Chesapeake is the most aggressive buyer of land in the new U.S. shale formations, which are believed to hold massive reserves of natural gas and oil.
"Right now there's still acreage to be acquired," McClendon told reporters at the Jefferies & Co energy conference.
Chesapeake's huge appetite for new property has left the company too debt-laden to pay for drilling, and forced it attract joint venture partners to help pay development costs.
McClendon earlier told the conference that the company still expected to close a joint venture worth $3.4 billion with a major international energy company by the end of 2011.
The company is expected to make an announcement later on Wednesday about a $750 million preferred share sale that it first announced on Nov. 3.
That sale of preferred shares is for its newly formed entity, CHK Utica LLC, which owns about 700,000 acres of leaseholds in the Utica shale.
Chesapeake will end its major acreage purchases next year, McClendon said, and is not interested in selling of its assets outright.
Shares in Chesapeake were up 4.3 percent to $24.80 on the New York Stock Exchange, lagging the gain of about 5.3 percent in the CBOE's oil companies index .

Pre-war Libyan output end 2012 feasible-oilmin

* New minister says will tell OPEC: we're back in business
* "No earthquake" planned in shakeup of energy sector
* Plan in works to increase production beyond pre-war levels (Adds background, quotes)
By Marie-Louise Gumuchian
TRIPOLI, Nov 30 (Reuters) - Libya's target of reaching pre-war oil output levels by the end of 2012 is feasible, the country's new oil minister, Abdulrahman Ben Yazza, told Reuters on Wednesday.
The former head of a joint venture with Italy's Eni , Ben Yazza was appointed to the interim government last week and will have the task of restoring output and reshaping a sector weighed down by corruption and inefficiency under former Libyan leader Muammar Gaddafi.
"I think it (restoring pre-war output by end-2012) will be feasible. We'll work very hard to achieve that target date, and hopefully even sooner. We'll give it all of our effort to do it," Ben Yazza said in his first interview since his appointment.
Asked what Libya would tell the Organization of the Petroleum Exporting Countries (OPEC) at its December 14 meeting, he said Libya was "back in business" and intended to produce its quota, and he was open to discussions about future OPEC output.
As for a potential shake-up of the Libyan oil sector that could change the balance of power between the oil ministry and the National Oil Corporation (NOC), Ben Yazza said there would be "no earthquake."
Before Libya's February uprising, it pumped 1.6 million barrels per day (bpd), but civil war brought flows to a standstill, cutting off exports of around 1.3 million bpd of its light, easy to refine crude to the international market.
Libyan oil output has climbed back to 840,000 bpd, the NOC said in a statement on Wednesday.
LONG-TERM PLANNING
Ben Yazza said that he would be working on plans to increase production beyond pre-conflict levels, and that he expected to have those plans ready within a year.
"The plans and thoughts are there to enhance production, increase the recovery factor from the reservoirs that we are producing," he said.
"And definitely there will be further studies to see the downstream area. Definitely there will be a lot of studies to evaluate all these issues and come up with a plan that can be executed."
Ben Yazza said progress had been made in improving security at oilfields and energy infra-structure, essential to prevent attacks by insurgents. Good security is a condition for foreign operators to send back their expatriate staff.
"Effort has already been under way to secure the fields. There are negotiations and talks with the concerned ministries to secure this issue at a 100 percent."
"There is security now in the fields and the proof is the production... All effort is being made to collectively make sure that the fields are secure and all the service companies and foreign companies can resume their operations in the field."
A member of Libya's interim government told Reuters in September it was drafting a proposal that would give more power to the oil ministry and shrink the responsibilities of the NOC to make it a purely commercial organisation.
This would be a change from the system under Gaddafi where the NOC handled both the daily operations of the oil sector and represented Libya on the world stage at OPEC meetings.
"This proposal will be reviewed thoroughly and we have to involve all the experts to study the pros and cons of this proposal," said Ben Yazza.
"So at the moment, it's not approved this proposal, we have to take our time to come up with the best because what we are doing now is setting the base for the future of the oil business. We will have to have lessons learnt from the past in order to have a better future working environment." (Editing by James Jukwey)

EMERGING MARKETS-Stocks steady after China move, zloty at 29-mth low

* Emerging stocks steady, China cuts reserve requirements
* Zloty hits 29-mth low vs euro
* Qatar issues $5 billion three-tranche bond
* Egypt stocks up for 2nd day after 1st round elections

LONDON, Nov 30 (Reuters) - Emerging stocks steadied on Wednesday, helped by a cut in Chinese banks' reserve requirements, but the zloty hit its lowest in nearly 2-1/2 years against the euro as investors continued to fret about the impact of euro zone debt woes.
China's central bank cut its reserve requirement ratio for banks by 50 basis points, the first reduction in nearly three years, to ease credit strains and shore up activity in the world's second-largest economy.
Chinese stocks earlier slumped to their worst day since Aug 8, on worries there would not be imminent easing of monetary policy.
European Union finance ministers and officials are meeting in Brussels on Wednesday to discuss plans to deal with the sovereign debt crisis, though investors remain sceptical about the outcome.
"There is tremendous focus on headline news," said Wike Groenenberg, head of CEEMEA strategy at Citi.
"The intensity of the crisis hasn't fully sunk into minds of some policymakers. My view is that we'll see further ex poste rather than ex ante policy decisions. We are in an environment of tremendous volatility."
The MSCI emerging equities index was steady, and after a bounce in the past few days it remains 3.5 percent above a multi-week high set last week.
The Thomson Reuters emerging Europe index dipped 0.13 percent.
Stocks in the Czech Republic, which is seen enmeshed in western European banking woes, gained 0.5 percent but remain close to April 2009 lows.
Emerging market currencies were generally weaker, with the forint down as much as one percent against the euro before the China news, shrugging off a Hungarian rate hike in the previous session and promise of more to come.
The zloty hit its lowest in nearly 2-1/2 years against the euro.
The Polish central bank has stepped in several times in recent weeks to stem currency losses, dealers and analysts say.
"We could see renewed pressure on the HUF while in Poland we would not be surprised to see the (Polish central bank) involved today," BNP Paribas said in a note.
Emerging sovereign debt spreads tightened by 6 basis points to 384 bps over U.S. Treasuries.
Gulf borrowers have been among relatively rare emerging Eurobond issuers in recent weeks, with their debt seen slightly less correlated to the problems in world markets.
Qatar issued a bumper $5 billion three-tranche bond late on Tuesday, its first bond in two years, which attracted orders in excess of $9 billion.
The bond has five, 10- and 30-year tranches.
"The inclusion of a very cheap 30-year tranche totally reprices the long end of their old curve," said one emerging debt trader.
"It's the five-year that retail are going for."
Egyptian stocks continued to rise after a high turn-out and peaceful process in the first round of Egyptian elections on Monday and Tuesday.
However, Egyptian assets have generally been weak due to political and economic uncertainty, with the pound testing near-seven-year lows on Wednesday.
"We need to see the central bank building up reserves, they have been down by 40-50 percent since February. Now that the currency has gone beyond 6 (versus the dollar), they do not have the firepower to maintain stability," said Anthony Simond, investment analyst at Aberdeen Asset Management.
"People would want to see an elected government in place and some sort of clarity regarding fiscal and monetary policy, with the fiscal deficit at 9-10 percent of GDP." (Additional reporting by Sebastian Tong; editing by Stephen Nisbet)

S.Africa stocks, rand surge on central banks move

An electronic board displaying movements in major indices at the Johannesburg stock exchange in Sandton September 23, 2008.

By Tiisetso Motsoeneng
JOHANNESBURG  - South African stocks surged more 4 percent on Wednesday, as coordinated efforts by major central banks to provide liquidity to the global financial system sent Johannesburg's benchmark index to its biggest one-day gain in more than 18 months.
The central banks of the United States, Europe, Japan, Canada, Britain and Switzerland announced a global action to provide liquidity to the financial system, lowering the price on existing dollar swaps.
"Markets are on the charge at the moment. We are seeing credible steps by central banks to address this crisis and that has given the bulls a reason to cheer," said Devin Shutte, a trader at Newstrading..
The JSE Top-40 index jumped 4.14 percent to 29,429.88, the highest closing level since Oct 31 and the biggest one-day gain since May 10, 2010. The broader All-share index added 3.72 percent to 32,812.64.
Mining firms were among the biggest gainers, also helped by China's move to cut the reserve requirement ratio for its banks the first time in nearly three years, a measure that could help ease a slowdown in the world biggest commodity consumer.
African Rainbow Minerals, which mines coal and platinum group metals, rallied 6.91 percent to 47.48 rand, while
Impala Platinum, the world's second-largest producer of the previous metal, surged 5.77 percent to 171.61 rand.
Coal and iron ore miner Exxaro Resources was 5.76 percent stronger at 179.79 rand.
The move by the central banks also boosted metal prices with copper rising to a two-week high while bullion added more than 2 percent.
Sasol gained 5.01 percent to 389.13 rand. Separately, the synthetic fuels maker said it was in talks to divest from its operations in Iran.
Pick n Pay added 3.37 percent to 43.57 rand, helped by news that an Australian court has ruled in its favour in the sale of its unit in that country.
Among decliners, Pioneer Foods fell 2.72 percent to 56.48 rand and budget hotels operator City Lodge lost 1.54 percent to 68.48 rand.
Volumes declined slightly to 322 million from 3.77 million in a session where advancers outpaced decliners by 220 to 54, according the preliminary data from the JSE.
The rand rose as much as 2.8 percent against the dollar, to its strongest in two weeks. Government bonds rallied sharply, in line with the stronger euro.
The rand was at 8.13 against the dollar by 1342 GMT after jumping to 8.1180 earlier. The yield on the four year bond tumbled 19.5 basis points to 6.78 percent while that for the longer dated 2026 paper fell 18 basis points to 8.49 percent.
"Because central banks have decided to add liquidity that's propped up everything," said Ion de Vleeschauwer, chief dealer at Bidvest Bank.
"The euro is up so that's why the rand is up. But I don't think it's going to last."

Zambia says won't re-introduce mine windfall tax

A mine worker looks on underground in Modderfontein east mine, outside Johannesburg, February 3, 2009.

LUSAKA  - Zambia, Africa's top copper producer, will not re-introduce a mine windfall tax it abolished in 2009 as such a measure could harm mining operations and negatively impact the economy, finance minister Alexander Chikwanda said on Wednesday.
"It would be unwise for the government to introduce a windfall tax when metal prices are unstable and are usually trending downwards," Chikwanda said in a statement.
Zambia doubled royalties on copper miners in the 2012 budget and the World Bank said that would not cripple the industry at the current strong prices but could cause problems if the commodity cycle reverses.
Zambia in 2008 raised company income tax from 25 percent to 30 percent, raised the mineral royalty to 3 percent from 0.6 percent, introduced a 25 percent windfall tax and separated hedging income from mining income for tax purposes.
But following protests from mining companies, the government in 2009 abolished the windfall tax.
Foreign mining firms in Zambia include Brazil's Vale, Canada's First Quantum Minerals, Barrick Gold, London-listed Vedanta Resources and commodity giant Glencore.

S.Africa's Gordhan hopes Europe will raise bail-out fund

PRETORIA  - South Africa hopes Europe will increase its bail-out fund and reassure global markets about resolving its deepening debt crisis that has led to a "most unwelcome" uncertainty, Finance Minister Pravin Gordhan said on Wednesday.
"We can only hope that by the time the (December meetings) are concluded, that we do have a sizeable fund, that individual European governments have taken the steps to move around the correct fiscal (trajectory) and that reassurances will be given to the market," Gordhan said at a media briefing.

Angola gives oil firms time to adopt new bank law

LISBON (Reuters) - Angola will give oil firms, commercial banks and monetary policymakers up to two years to adjust to a new law forcing oil companies to use the country's banking system, Central Bank Governor Jose de Lima Massano was quoted as saying on Wednesday.
The new law, approved by parliament on Tuesday, means oil companies active in Africa's second largest crude producer after Nigeria will have to pay their taxes and bills from overseas sub-contractors and suppliers in dollars through local banks.
"This will bring greater capacity to the financial system in supporting the development of the national economy and will also allow a bigger integration of the oil sector into the Angolan economy," daily Jornal de Angola quoted Massano as saying.
Angola's economy relies heavily on oil revenues, which make up over 90 percent of export income.
Massano warned, however, that the new rules will pose some challenges for monetary policymaking and the central bank's goal of keeping the kwanza currency stable.
"There is a certain fear that with a great flow of foreign currency into our economy, we may see a great appreciation of the kwanza to above the desirable levels to continue stimulating economic growth," he was quoted as saying.
The central bank governor has been praised by the IMF and credit ratings agencies for improving Angola's monetary management, keeping the kwanza stable and curbing inflation.
Analysts say around $10 billion could enter the financial system each year under the new law.
The central bank will therefore implement the new law in two phases, allowing it to adjust its monetary policy instruments and also giving time for the oil companies and local banks to implement the necessary operational changes, Massano added.
In a first phase, the oil firms will have to use local banks to pay their taxes and bills from local providers, and only after one or two years will they be obliged to use Angolan banks to pay overseas suppliers.
Until now, the oil firms were allowed to use overseas banks under a special regime, mainly because Angola's banking system unable to handle the transactions.
But analysts say the Angolan banking sector is now solid, with its banks well managed and boasting strong assets.

The country's main banks include state-owned Banco Angolano de Investimento and units of Portugal's Banco Espirito Santo and Banco BPI, while Standard Bank, Africa's biggest bank by assets, entered Angola this year.

Nigeria sets ambitious oil targets, sceptics abound

LAGOS - Nigeria plans to produce 3 million barrels per day (bpd) of crude oil by 2015 and build three new refineries adding 445,000 bpd of capacity, the oil minister said on Wednesday, ambitious plans which have been promised before.
Analysts and oil executives doubt the plans are achievable.
Africa's largest energy industry is struggling because a far reaching Petroleum Industry Bill (PIB) has been locked in dispute for four years, depriving it of billions of dollars in lost foreign investment, oil and government officials say.
"Our aspiration is to increase crude oil reserves to at least 40 billion barrels and production of 3 million barrels per day respectively by 2015," Diezani Alison-Madueke told reporters at an investor conference in Lagos.
"Our current crude oil production is approximately 2.5 million bpd; current gas production is 8 million cubic feet per day." Nigeria is a member of oil producing group OPEC, which sets output limits to monitor global supplies and prices.
Africa's most populous nation has a crude oil OPEC output quota of 1.67 million bpd, which it seems happy to far exceed given a healthy oil price above $110 a barrel. Should oil prices decline, Alison-Madueke may have to explain plans to boost output to fellow OPEC countries.
She said the PIB may have to be presented back to the national assembly through the presidency to ensure the correct version is used. The main brake on the reforms is powerful vested interest but there are also several different versions of the proposal, which is slowing down lawmakers.
SCEPTICAL
"While the stated intent to increase oil production and increase reserves is positive, market participants will justifiably question how much progress is actually likely," said Razia Khan, Head of Africa Research at Standard Chartered.
"The fact is, the longer the regulatory uncertainty of a PIB in equally uncertain form hovers over the industry, the greater the likelihood that crucial investment - even to sustain Nigeria's current production - is delayed," Khan added.
Despite holding the world's seventh-largest gas reserves and pumping over 2 million barrels per day of crude oil Nigeria only produces enough electricity to power a medium-sized European city and has to import almost all of its refined fuel needs.
The West African nation's four current refineries have a theoretical combined capacity of 445,000 bpd, which have been working at minimum levels for years, except for one which is at around 60 percent capacity, industry sources have said.
Dozens of maintenance contracts have been handed out to fix the refineries and several memorandums of understandings to build new ones signed in the last decade with no progress made.
Foreign investors cite corruption as the biggest barrier to investing in Nigeria and the country's national oil company NNPC often comes in for the biggest criticism. One international watchdog said it was the world's least transparent oil company.
"I'm afraid that any pledges about refineries, reserves or the PIB fall on deaf ears now because we have heard them over and over again through the oil minister's years in office," said an executive at a oil company operating in Nigeria, asking not to be named.

Kenya ranked worst in global economic crime survey

NAIROBI - Kenya recorded the highest level of economic crime among 78 countries in the past year, with the theft of assets and money in businesses and government agencies on the rise, a report by consultancy PwC showed on Wednesday.
Kenya has a reputation for being one of the most corrupt countries in east Africa, and its judiciary is notorious for slow delivery of justice and rampant bribery. The government has repeatedly stated it is fighting these vices.
The country's incidence of economic crime of 66 percent was almost twice the average of 34 percent among all countries in the global survey, said PwC.
Second to Kenya on the league table of countries with the worst rate of economic crime was South Africa, followed by other African countries, Britain, New Zealand and Spain, which had similar levels of fraud to Australia.
Kenya ranked second-highest after South Africa in 2009 when the last survey on economic crimes was conducted by the firm.
Japan had the least economic crime, followed by Indonesia, Slovenia and Greece, the survey which included responses from privately-owned, listed and government agencies showed.
Other than theft, Kenyan businesses said they had been hit by accounting fraud, bribery, corruption and money laundering.
"Economic crime is on the rise globally, but is accelerating in Kenya," said Martin Whitehead, a partner at PwC and head of the firm's forensic services unit.
Whitehead said economic crime was expanding because many Kenyan organisations have a somewhat cavalier attitude towards the problem and do not report the crimes to the police, while others cited a lack of confidence in the judicial process.
Most fraudsters were 30 to 40 year-old males, with at least a university degree and usually had worked for about 5 years in the company they were defrauding, Whitehead said.
"Although some companies are getting tougher, an awful lot are not. Some say it is of no use to report to the police or take civil action. It is a long process, nothing will be done," he said.
A total of 91 organisations in Kenya were surveyed. Many of them said cybercrime was also on the rise, mostly from Kenya and followed by Nigeria.
"Globally, Africa is seen as one of the main sources of cybercrime threats," Whitehead said.

A HUBBY IN AGONY: Starved Of Sex For 6 Years, Seeks Divorce

A HUBBY IN AGONY: Starved Of Sex For 6 Years, Seeks Divorce

Guinness Ghana says rights issue oversubscribed

ACCRA  - Guinness Ghana Breweries said on Tuesday that its rights offer to raise 70 million cedis was oversubscribed by 44.6 percent, allowing it to raise 101.22 million cedis.
Guinness Ghana announced the offer earlier this year, and had said 40 million cedis would be used for debt and interest payments, and 28.5 million for future capital expenditure.

S.Africa's Group Five cuts 500 jobs, sees tough 2012

JOHANNESBURG, Nov 29 - South Africa's fourth-largest construction firm Group Five slashed 500 jobs in the past five months and has downgraded its 2012 trading outlook, reflecting heavy dependence on the slumping domestic construction market.

Group Five, which employs about 12,000 people, said it retrenched the 500 - including contract workers - since June and could cut more in the coming months although the numbers were likely to be insignificant.

South Africa construction companies, once the darlings of investors in the building boom leading up to the 2010 soccer World Cup, have been plunged into oblivion as they struggle to find replacement work elsewhere.

Group Five CEO Mike Upton said although the group wanted to have "a firm home base", it had plans in place to ensure its order book is split 60:40 South Africa work and cross-border work, respectively.

Group Five's 9 billion rand worth of secured work as of October is heavily weighted in favour of South Africa at 66 percent and the rest from neighbouring southern Africa countries, Middle East and Central and West Africa, it said.

The company, which operates in 22 countries outside South Africa, said it was bidding for work in countries that include Qatar, Nigeria, the Democratic Republic of Congo, Poland and Bulgaria.

Upton said the company has identified 138 billion rand worth of new work that it could bid for, 10 percent of which it has been selected as a preferred bidder. The potential job is made up of 57 billion rand offshore and 81 billion rand domestic.

Shares in the company, which are down about 40 percent so far this year, were up 0.72 percent at 22.52 rand by 0247 GMT.

AfDB says to throw African traders credit lifeline

JOHANNESBURG (Reuters) - The African Development Bank (AfDB) is looking into ways of providing trade finance to firms doing business with Europe, where an interbank credit squeeze has driven up the cost of funding, chief economist Mthuli Ncube said on Tuesday.

In ominous signs for Africa of a repeat of one aspect of the 2008 credit crisis, Ncube said some European banks were no longer willing to lend to firms trading with the poorest continent, threatening its economic growth.

"With the crunch in Europe the cost is creeping up and the willingness of the banks to extend the credit in the first place is also an issue," he told Reuters in an interview.

"Trade finance is an area where we will intervene more visibly. It's something that we have not done a lot in the past, but that is going to change."

Kenya on track with Eurobond issuance plan: finmin

NAIROBI (Reuters) - Kenya is pressing on with plans for a debut Eurobond issue for $500 million in this fiscal year, its finance minister said on Tuesday, adding that the government would give an update on the issue within a fortnight.

Uhuru Kenyatta declined to confirm or deny last week's report by IFR Markets, a Thomson Reuters news and market analysis service, that the government had picked Barclays Capital and Deutsche Bank as lead managers for the issue.

"That is an issue that is in progress. Officials are still going through it. Within about a week or two we will be in a position to announce the current status. We are definitely going ahead with the Eurobond," Kenyatta told Reuters, when asked whether an inaugural Eurobond issue would come this fiscal year.

Kenyatta was speaking on the sidelines of a conference in the capital Nairobi.

Hoping to benefit from a good credit rating if next year's general election goes smoothly, officials had planned to issue a $500 million international bond in its 2012/13 (July-June) fiscal year.

But they have been forced to bring the issue forward to this fiscal year after a steep fall in its currency against the dollar and a deteriorating balance of payments position exposed the need for adequate hard currency reserves.

The current account deficit widened to $3.38 billion in the year to June 2011 from $1.92 billion in the year ago period, on the back of higher imports of merchandise goods.

Data for the third quarter of 2011 are due later this month and are expected to show a further deterioration.

Fixed-income analysts said Kenya may use the issue to shore up its funding programme for this year after investors stayed away from securities auctions in the local market.

The government missed its domestic borrowing target by a wide margin in the first quarter, collecting just 12.3 billion shillings against a target of 49.8 billion shillings.

If and when Kenya issues, it would join South Africa, Nigeria, Senegal, Namibia, Ghana and Gabon in the list of African sovereigns to borrow money in the international capital markets.

Several others, including Tanzania, Zambia and Botswana, are also thought to be considering debut deals. Kenyatta said the borrowing plan through a Eurobond was still targeting to raise $500 million.

The government is also awaiting final approval from the International Monetary Fund for the disbursement of a $250 million extended credit facility for balance of payments support, in addition to $500 million agreed earlier this year.

S.Africa Q3 GDP disappoints as mining contracts

JOHANNESBURG - South Africa's economy grew less than expected in the third quarter highlighting domestic weakness that might see the Reserve Bank consider cutting interest rates.

Rates on the forward rate agreements (FRA) market -- a gauge of interest rate expectations -- also trended lower after the data. Government bonds firmed sending yields lower.

The South African Reserve Bank (SARB) has left the repo rate flat at 5.5 percent throughout 2011, after reductions totalling 650 basis points in the two years to the end of 2010.

Statistics South Africa said on Tuesday gross domestic product for the third quarter was at 1.4 percent on a seasonally adjusted and annualised basis - less than the 1.8 percent the market expected - after 1.3 percent growth in the second quarter.

Mining, manufacturing and agriculture, which make up about a quarter of the economy, contracted while consumer spending supported the economy.

"Any boost provided by a rebound from strike action is likely to have been eroded by the economy's poor export performance on the back of the synchronised downturn in the global economy," said Annabel Bishop, economist at Investec.

"The poor economic growth outcome has significantly increased the chance of an interest rate cut materialising at the next MPC (monetary policy committee) meeting."

The Reserve Bank has said its focus remains the achievement of a 3-6 percent inflation target over the medium term but will remain sensitive to the domestic economic situation.

Credit data earlier showed growth ticked up to 5.52 percent a reflection of a modest pace in recovery.

JOBS

The National Treasury cut its 2011 growth forecast to 3.1 percent citing risks from a sluggish global economy.

"It seems that we are more dependent on the global recovery than domestic demand," said Mandla Maleka, economist at Eskom.

"If that is the case, then let's expect interest rates to remain low for an extended period," he said, adding the GDP number could put pressure on the central bank to consider lowering interest rates.

South Africa needs to increase the rate of economic growth to an average 7 percent a year to make a meaningful impact on unemployment that is at 25 percent of the labour force.

Finance Minister Pravin Gordhan has said it will be difficult for South Africa to meet its target of creating 5 million jobs by 2020.

President Jacob Zuma's government has prioritised job creation to improve the plight of the millions who continue to live in poverty, 17 years after the end of minority rule.

"Without a meaningful increase in employment, especially formal sector employment, the South African economy will continue to lose momentum, aggravating the already unbalanced and worrying social conditions," said Kevin Lings, economist at Stanlib.

"A range of policy initiatives are crucial in facilitating economic growth, asking monetary policy (interest rates) to solve all of South Africa's economic woes is unfair and unrealistic."

The Reserve Bank's next meeting is on Jan 17-19.

Mobile Technology in Africa Continues to Make Rapid Inroads

In our discussion of investment opportunities in Africa, we at Nile Capital focus on three key themes around which we seek to invest. One of these themes is the growth in infrastructure networks. While this means that we seek opportunities in Africa’s growing physical infrastructure, this focus also extends to Africa’s growing digital infrastructure and mobile technology sector. A recent article in the Wall Street Journal Technology blog helps explain why.

As we have written in the past, the opportunity to invest in Africa’s growing consumption power is substantial. Already Africa is a continent which contains over one billion people: put differently, about one out of every seven human beings currently lives in Africa. Based on population growth rates, the continent’s population is expected to grow to over two billion by 2040, at which time approximately one in every four people on the globe will be African.

In addition, Africa’s telecommunications land line network remains woefully inadequate. In many countries where populations climb into the millions, the number of land line phones barely breaks five figures. The challenge and prohibitive cost of maintaining a land-line network had for many years made it impossible for Africans to remain connected.

However, the introduction of cellular phone networks has caused a substantial shift in the landscape on the continent. Whereas at the turn of the century cell phones were still relatively uncommon, market penetration over the past ten years has been profoundly rapid. As we previously wrote:

Since the year 2000, McKinsey notes that 316 million new phone subscribers have signed up in Africa. However, they also note that in 2008 only 39% of Africa’s population had access to telecom services , 38% had access to modern retail, and 20% had access to banking (note that these statistics include South Africa, where the numbers are 92%, 68%, and 60% respectively, skewing the average up). It is amazing to think of the potential for growth in companies that are able to fill those gaps.

According to the Wall Street Journal’s Tech blog, cellular penetration across Africa has not only remained strong in the subsequent years, but it has actually overtaken Latin America as the world’s second largest cellular phone network, behind only the Asia-Pacific region. According to the GSM Association (the global mobile phone operator’s body), Africa’s cell phone market has grown by more than 20% annually over the past five years, bringing the total number of subscribers above 649 million through the fourth quarter of 2011. From 2007 through 2011, the number of cellular connections has more than doubled, rising from 283 million only five years ago. In addition, the Association noted that it expects this number to rise to 735 million by the end of 2012.

However, there remains a significant opportunity for further penetration in the cellular space. While access has continued to improve, the Association also noted that 36% of individuals in Africa’s 25 largest markets remain without access to cellular phones. In addition, 96% of phones are currently pre-paid, and data technology has only just begun to make inroads in the market.

Nile Capital, believes that there are a number of opportunities to participate in Africa’s growing mobile sector. While this may mean participating in the growth of some of Africa’s largest telecommunications firms, it also means understanding how cell phones can change the landscape of communication. For example, mobile banking is now making it possible for Africans who reside far from local branches to send and receive funds electronically, which helps to drive growth in retail bank deposits.

While cellular communication in Africa becomes more prevalent and services improve, we seek to identify trends and opportunities to help our clients share in the growth.

To read the full report by the GSM Association, please visit here.

For more information about investing in Africa, please contact Nile Capital Management at (646)367-2820 or info@nilecapital.com.

We know Africa - from Cairo to Capetown.